Cramer's 'Mad Money' Recap: Why the Data Didn't Matter

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NEW YORK ( TheStreet) -- Have the markets lost their minds or did Friday's miserable unemployment number just not matter?

That's the issue Jim Cramer pondered. He told his "Mad Money" viewers that while it might seem unfathomable the markets could rally on a day with so much bad news, in reality the markets' reaction makes perfect sense.

Cramer said that first, with the economy still stalled, the markets are once again hoping for an early Christmas present from the Federal Reserve next week. If things get bad enough, the Fed will surely have to act. At least, that's the thinking on Wall Street.

Second, Cramer reminded viewers the U.S. is no longer at the center of the economic universe -- Europe is, and hope still springs eternal the continent is about to do the right thing.

Third, Cramer said the Chinese pulled the trigger on some big stimulus projects, which is great news for companies United Technologies ( UTX), Caterpillar ( CAT) and Freeport McMoRan ( FCX).

Fourth, the woes at Intel ( INTC) prove weakness in PCs, not weakness in technology overall, which is why Apple ( AAPL), a stock he owns for his charitable trust, Action Alerts PLUS , along with Google ( GOOG) and Amazon.com ( AMZN) are all hitting highs.

Finally, Cramer said the markets are taking note to the fact that no sitting president has ever overcome high unemployment. Thus the markets are betting that Mitt Romney might have a chance in November, which would also be good for the markets.

Put all of these factors together and Cramer said it's easy to see why the markets were able to shrug off today's unemployment number and not get crushed as they would have in months past.

Next Week's Game Plan

All eyes will be on the Federal Reserve next week, Cramer told viewers as he laid out his "Game Plan" for next week's trading. Cramer said the Fed's meeting on Wednesday and Thursday will be key for the direction of the markets.

But beyond the Fed, Cramer said the week begins with Chinese economic data on Sunday. If these results are disappointing and with no interest-rate cuts, the sellers will be out on Monday and investors can look for their Friday gains to disappear.

On Monday, Cramer said he'll be watching two great recent initial public offerings, Palo Alto Networks ( PANW), a cyber security play, and Five Below ( FIVE), a discount retailer. Shares of Palo Alto are up 33% from their after market IPO price, while shares of Five Below are up 30%. Cramer said both companies remain strong buys.

Tuesday brings United Natural Foods ( UNFI), earnings that should reignite interest in Whole Foods ( WFM) and Hain Celestial ( HAIN). Cramer advised using any weakness on Monday to pick up shares in these names.

Then on Wednesday, it's Apple's turn to take center stage with an expected iPhone announcement. Cramer said if the new device has a "wow factor," shares of Apple will continue to soar. But if the product is only slightly cooler, then look for shares to dive.

For Thursday, Cramer said he'll be watching Pier 1 Imports ( PIR), a company he's confident can deliver on its numbers.

In non-stock news, Cramer said he'll also be keeping eyes on the U.S. Department of Agriculture crop report on Wednesday, a report that should bolster seed makers Monsanto ( MON) and DuPont ( DD).

He also awaits the German court ruling on whether that country can participate in the European bail out. Then on Thursday, it's the G-20 Summit, along with the Fed, that will have investors glued to their seats.

Bulls vs. Bears

"Normally, I stay away from battleground stocks," Cramer told viewers, but sometimes you have to take sides. He was talking about Questcor Pharmaceuticals ( QCOR), a stock that's had a remarkable seven-year run from just 50 cents a share to $52 a share.

Cramer explained that unlike many smaller drug makers, Questcor is not playing "FDA roulette," hoping for approval on a host of new drugs. Instead, the company has just one drug, Acthar gel, which it is now marketed for 19 different ailments, with more on the way.

At issue is the battle between the bulls and the bears, said Cramer. The turbulence started in July, when several Web sites began reporting rumors that generic competition for Acthar was on the way. That sent shares spiraling, something that benefited the 44% of the company's shares that were sold short at the time.

But Cramer said he's not buying those rumors since bringing a new drug to market involves a ton of paperwork that takes at least six to 12 months to complete. So far, no paperwork for a would-be Acthar competitor has surfaced.

He said that Novartis ( NVS) does sell a similar drug in Europe, but the economics don't work for the company to bring the drug to the U.S. since Questcor's 19 indications would involve 19 clinical trials to be performed before that drug would be on the same playing field as Acthar.

Cramer said these rumors of "questionable" origin are at odds with the Questcor, which just received orphan drug status for Acthar, giving it even more incentives for making the drug. The company also just reported terrific prescription data, which shows how much doctors love the drug.

So in the battle that has become Questcor, Cramer said he's siding with the bulls as this stock is not yet done going higher.

Lightning Round

Here's what Cramer had to say about callers' stocks during the "Lightning Round":

Nvidia ( NVDA): "People are worried about the quarter. I say don't buy."

Baidu.com ( BIDU): "I am not recommending any Chinese stocks right now."

WW Grainger ( GWW): "Any weakness, I want to buy this one. It's a terrific company."

Nordic American Tanker ( NAT): "The daily tanker rates are horrendous. I think you need to sit on the sidelines for now."

Bank of America ( BAC): "Bank of America is good to go. I think you can own it. "

Consolidated Edison ( ED): "I do like their dividend. I'd use $58 as my entry point."

Executive Decision

In the "Executive Decision" segment, Cramer sat down with David Pyott, chairman, president and CEO of Allergan ( AGN), which remains the fastest-growing medical company out there as it continues to find new uses for older products.

Pyott said the consumer is "alive and well," something that has helped Allergan continue to grow at a rate of 9.5% a year when adjusting for currencies. He also noted that the second half of 2012 is poised to be even better than the first, thanks to a competitor for Botox being taken off the market.

"We'll be once again taking share," said Pyott, something that will help Botox continue to grow in the double digits.

Among some of the new indications for the company is the use of Botox for migraines. Pyott said the migraine business is picking up steam and the company has trained over 6,000 doctors in its use so far. He said Allergan is running both branded and non-branded advertising in the migraine space, both of which are working well to find patients in need.

Even newer to the company's stable of products are those for overactive bladder. Pyott said right now Allergan's treatments are approved for use with patients who have incontinence as a result of a spinal cord injury. In 2013 the company hopes to receive approval for severe incontinence, a far bigger indication than spinal injuries.

Pyott also discounted a slowdown in the company's eye-care business, calling the anomaly a "blip" related primarily to inventory.

Cramer continued his recommendation of Allergan.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer explained exactly what caused shares of Chipotle Mexican Grill ( CMG) to pop more than $24 on seemingly no news. He said that Chipotle didn't report better same-store sales, nor provide an update on its new restaurant concept or signal a return to growth. Instead, what caused Chipotle to rally was yoga.

Cramer said that when Lululemon Athletica ( LULU) reported a terrific number today, on the heels of beauty retailer Ulta Salon ( ULTA) doing the same, that was enough to set the growth investors into motion, taking up all of the once high-flying momentum names.

Cramer said that yes, good news for yoga can cause a Mexican food chain to rally. The key, he said, is to be able to recognize that Lulu did indeed have good things to say. Once you recognize that, you can easily anticipate the moves of all the others.

--Written by Scott Rutt in Washington, D.C.

To email Scott about this article, click here: Scott Rutt

Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.
At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC Universal or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

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Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

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